China property investors spend less abroad

Hong Kong

CHINA'S real estate outbound investment in the first six months fell to its lowest level since 2015, property consultancy firm Cushman & Wakefield said in a report, mainly hurt by tighter controls on lending.

Chinese institutional investors spent US$4.3 billion on property overseas in the second quarter, said the report published on Wednesday, a 45 per cent slide from a year ago. For the first half, volume fell 37 per cent to US$9.9 billion. This led Cushman & Wakefield to downgrade its forecast on the full-year investment volume to be 40 to 50 per cent lower than 2017, compared to an original forecast of a 30 to 40 per cent drop.

"Things may get worse before they get better," said Jason Zhang, head of China outbound investment & advisory services at Cushman & Wakefield. "Geopolitical issues will negatively impact investment, mainly in the US market for the remainder of the year."

In the second quarter, the firm said China's deleveraging had a bigger impact on investment volume than the country's new rules on outbound property investment.

However, investments in the office space increased from the first quarter, up 44 per cent to US$3.6 billion, though Cushman & Wakefield expected investment activities in the sector would be limited for the rest of the year. REUTERS